New 5 billion-dollar oil and gas project to start off at Tengiz

66 new wells will be drilled in the field.

Chairman of the Presidium of Kazakhstan's Union of oilfield related companies Rashid Zhaksylykov told about the new projects in the oil and gas sector in Kazakhstan, BNews.kz correspondent reports.

The oil and gas sector is active in the country. Positive trends in oil prices have revived the sector: a start to the project on Karachaganak's expansion with the budget, not less than 5 billion dollars is given, future expansion projects with the budget amounting 37 billion dollars is being implemented, the Khazar and Kalamkas-sea projects will be implemented jointly on the Caspian Sea.

"In addition, the North East Ring Project (NERP) with the budget of 5 billion dollars is expected at Tengiz - 66 new wells will be drilled. And, the sector's participants must be involved in these projects," said Rashid Zhaksylykov.

He mentioned the tasks set in the recent Address of the Kazakh President to the people of Kazakhstan, including the items promising the support for the oil and gas sector.

"As you know, from the moment of entering into the WTO our country cannot require new oil producing companies to procure items produced in Kazakhstan. Although we can observe that the WTO's founder - the USA takes controversial actions against the Organization's rules. The head of state, in his Address, gave a max cue to develop and support Kazakhstan's share," said the Chairman of the Presidium.

Also, it was instructed to revive the economy's credit sector: the banks were ordered to provide credits to real operators of the economy.

"One witness that the banks cannot provide liquidity for oilfield related companies - to replenish working capital. Some tenders are estimated at tens and hundreds of millions of dollars. It is not a secret that few domestic companies have free working capital. And, this instruction should revive the sector of the economy," said Zhaksylykov.

Director-General of the Union of Oilfield Companies of Kazakhstan Nurlan Zhumagulov explained why it was necessary to expand the Karachaganak and how it would affect the country's economy.

"Now the Karachaganak project recovers its cost, and, accordingly, in accordance with the agreement of production sharing there are certain norms, once the project recovers its cost, then the country's share increases. If it is about the Karachaganak project, then, before the projects started to recover its cost, the share of the country was 20%, nor this figure equals up to 80%. It depends on the cost-effectiveness level of the project. The expansion project of Karachaganak provides for the increase in the volume of oil, and it means the increase in incomes in the budget," said Nurlan Zhumagulov.

He noted that the expansion also provided new workplaces, increase in volumes of Kazakhstan's companies and that of the share of Kazakhstan's payments to the future increase of the amount of oil.

By BNews.kz.